As your Estate Agent in Lytham St Annes and The Fylde we are here to provide you with as much information as possible to help you buy or sell your house. Please browse our glossary of terms and if there is anything else you wish to ask please call us on 01253 796996.
Accepting an Offer
This means you've instructed your solicitor or conveyancer to proceed. Although you haven't made a legal commitment, you've agreed with the buyer that you're going ahead with the sale at the price offered by the buyer. The only obligation at this stage is a moral one - the 'Do as you would be done by' principle applies! If you want us to, we can mark your property details in-branch as 'Under Offer', along with your For Sale board and your internet advertisement. We'll continue to tell you about any other offers received, and keep the buyer informed of these offers as part of our 'fair deal' service.
This means getting behind with payments - be it mortgage, rent, rates or whatever. In a nutshell, you should try to budget carefully to avoid getting into arrears. If a real emergency crops up, do not panic but please take advice immediately. Talk to your Financial Adviser or ask the local Citizen's Advice Bureau to recommend somebody. With the best will in the world these comments can only give you very general advice.
Remember there is more to buying a home of your own than just repaying the mortgage. Apart from the service charges - electricity, gas, water, etc. - you will be paying council tax to the Local Authority and should also bear in mind that your investment will from time to time require preventive maintenance and repair, costing you more money.
Arguably the most important commitment of all is the mortgage payment. If you miss one please make sure that you put it right the next month. Ideally, drop the lender a note to explain the problem and apologise.
If you look like missing a second payment talk to the lenders in advance of this happening - do not wait until you get a warning letter from their administration unit, as by then your name will be in the system as a defaulter. Should a third payment be missed you could be in real trouble. Depending upon the terms of your particular mortgage agreement the lender may be able to increase your interest rates with immediate effects - or even take steps to have you evicted from the property. It is at this point you will start to lose control. Do not ignore the warning correspondence (tempting as that may be!); this will only make matters worse. If you adopt a responsible attitude, explain your problems and negotiate carefully, you are far less likely to be taken to court.
At this stage you really must talk to an experienced financial adviser. If you need an introduction, please give us a ring and we will suggest the name of a local practitioner.
There are many options that can be explored. For a start we can provide an idea of the current market value of the property. If that has increased significantly it may open up other possibilities. This greater margin might well enable you to restructure the mortgage and make up the missed payments in other ways. But we stress that you must take expert advice from a qualified independent financial adviser.
So, to recap: whatever you do, please treat the mortgage payments as a priority. Not only is your home at risk but if you were evicted this can be more stressful than going bankrupt and can affect you for many more years.
House prices are negotiable. A property is only worth what the person who wants it most is prepared to pay the present owner. And the asking price is merely the initial price at which a property goes onto the market. The sale price will depend on many other factors.
Our experienced negotiators can normally assess the appropriate asking price within fine limits - considering many factors such as the type and popularity of the property, the strength of the current market and - what is almost as important - the length of time open to the seller to arrange the move. There is little point in setting an asking price way above comparable property already on offer with which your property will be in direct competition. With our understanding and knowledge of the local market place, you can be confident that we will secure a fair price for you.
Auctions are often used to sell property where the owner is not living in the property. There are a number of large auction houses which hold regular sales, sometimes lasting all day, when a large portfolio of property will be offered for sale. Some will be tenanted property sold as an investment property producing a given level of rental income. Others will be property being sold by the financial institutions which financed the original mortgage and where the borrowers were unable to keep up the repayments. The sale prices may sound cheap but such property is rarely in good order and may have been seriously vandalised.
You may find a bargain at such an auction but do take care. Our advice is that you should never buy anything at this type of auction unless you have had a full building survey undertaken first and know what you would be taking on. Unless pre-agreed you will be expected to pay a ten-per-cent deposit to the auctioneer with the balance due at completion a set number of days later. There is no flexibility. That means if you have not sold your own home but want to buy at an auction you may need some form of short-term funding through a bank.
Sometimes a large house or country property will be sold at an individual auction. With adequate publicity it will be a successful event and establish a full market price.
The main point of an auction is that the final sale price is determined by the potential buyers bidding against each other - usually in public. The top offer is accepted when the auctioneer warns that he is about to sell the property and then drops his hammer. This action creates an agreement which is immediately binding on both parties.
Buying is one thing, but this is not necessarily the best way to sell a home since only a few people will be free to bid on any particular day as they must have their finance pre-agreed, and be able to go ahead immediately. In our experience a private treaty negotiation may well secure a better price.
Development land is often sold by auction and it could be an ideal way to sell secondhand goods and chattels. We can advise about local auction rooms which specialise in holding regular sales of this type.
This is a complex subject. If you want further information we can put you in touch with a local specialist agency.
This expression covers all the legal work involved in the transfer of ownership of a home from one person to another. The work is usually handled by a solicitor or licensed conveyancer, both of whom must have achieved suitable professional qualifications, have adequate indemnity provisions in place and the necessary experience to handle the matter competently.
Conveyancing means everything that happens from when your initial offer is accepted "subject to contract", through to exchange of contracts and the full legal completion. Technically, a conveyance is the final transfer document passing over the title and the legal responsibilities that go with ownership of the property. One day this will all be done electronically!
This expression is thought to derive from a Yiddish term for a swindle and is widely misunderstood. Many people claim to have been gazumped when they have merely lost a property to another buyer who made a higher offer. On that basis everybody - bar the eventual highest bidder - at a public auction could claim they were gazumped!
When a sale is being handled by private treaty negotiation the various bids are not made public. As estate agents our duty is to handle the sale on behalf of the owners and we must report every offer we receive. We will also pass on any additional information that prospective buyers want us to submit. We do this impartially and will not knowingly mislead anyone involved. What we are not entitled to do is tell one prospective buyer what another rival buyer has offered - without the full agreement of both parties. And, of course, we have no say in which offer the seller-client accepts.
Furthermore, we cannot pretend we have an offer that does not exist nor may we deny that we have a number of different offers when that is genuinely the case. There are strict regulations covering all these aspects of sale negotiations. They were drafted by Government lawyers to reflect best professional practice which we would always follow.
So what is gazumping? Remember that home owners have an absolute right to sell their property to whomsoever they wish. They need not necessarily accept the highest offer and they may also change their minds over any aspect right up to exchange of contracts.
In practice gazumping occurs very rarely. It happens where all the terms for the sale have been arranged and matters are in the hands of the respective conveyancers when a higher offer is received at a late stage and the owner tempted to accept. Sometimes the first buyer does not know about this (to them unwelcome) development until their contract is returned. At other times the owner may instruct his estate agent to contact the first buyer to report that they have received this further offer and ask whether they want to equal or better it. That is gazumping.
Sometimes this will arise when the seller has accepted an original offer which was on the low side for the current market conditions - especially when prices were rising. Then another buyer comes along who realises the property's true worth and puts in a significantly higher bid facing the owner with a dilemma. Being fair to the owner, this first prospective buyer has lost the chance of snapping up an under-priced bargain at his expense.
We always aim to price our properties realistically, advertise them extensively and endeavour to agree a fair price to both parties at the outset. However, the price initially agreed is always subject to final negotiation and, as remarked, we are legally obliged to pass all offers to our clients right up to the exchange of unconditional contracts. Effectively, in this respect, we have no option. But equally we have no real say in any decision to gazump.
There is an answer: exchange contracts quickly. The fact is most transactions move ahead at a speed dictated by the prospective buyers, quite possibly held up by the slow sale of their own property.
These days, with registered title and the rapid progress of electronic conveyancing, there is no reason why contracts could not be agreed in a few days rather than weeks. One suggestion would be to offer to exchange contracts quickly while leaving the completion date open to later negotiation. The seller may be flexible and happy to agree to a delay. This would much reduce the chances of your being gazumped. No promises, but it is a thought.
Some solicitors have devised a form of lock-out agreement - purported to reduce the risk of being gazumped. These are, in effect, an option to exchange contracts within a pre-agreed period of time. In some cases these quasi-agreements may even work although one cannot have a binding agreement to enter a future binding contract - the first agreement would then be the contract.
This is the rent payable in the case of leasehold land. Normally a fairly small rent will be payable to the freeholder - usually annually - but the details will be set in the lease. In the case of flats, there may be more than one form of ongoing rental liability plus service charges, etc. Do check. Guarantor Someone who guarantees an obligation of another.
HM Land Registry (LR) is an invaluable national resource: it was regularised in legislation in 1924 although the compilation work had started in 1850. Today, it has become a major data base which records the current ownership of well over 95% of residential properties in England and Wales. Incidentally, there are separate Registries in Scotland and Northern Ireland but this facility for the State to, in effect, guarantee title is uniquely British.
The LR is a Government agency and entirely self-funding. Registration is compulsory when any of the remaining unregistered properties are sold or mortgaged. This means the remainder will be added as quickly as practical although 100% can never be achieved as some of the unregistered titles will never come onto the open market.
Not only does the Land Registry hold the full title information on some 20 million properties but it is fully computerised and open to public inspection. The information is available as a hard copy by post, or in electronic format down the line to anyone holding an account and the necessary access code. To the legal profession an LR title is proof of ownership and it comes with an unconditional guarantee due to the extremely high accuracy of the data base. The inspection fee is nominal - currently just 4.00 per item.
The information available includes a description of the full title with the title plan based on Ordnance Survey data. All restrictive covenants, many easements, and all rights of way will be listed together with a full lease where the property is not freehold. The information also includes the price paid the last time the property was sold.
The LR also has a full record of any legal charge registered against the property by a building society, bank or mortgage lender which has lent money or taken a second charge. The larger building societies used to hold many miles of property deeds in secure storage. These days deeds are effectively waste paper - all that matters to the institution is the title number on the single sheet Land Charge Certificate.
In England and Wales over 450,000 period properties are listed on a Statutory Schedule as being of Architectural or Historic Interest. Of these about 6,000 are Grade I listed. However, very few of these landmark buildings are in private ownership so rarely if ever come onto the market.
The majority are listed as Grade II with the most important of these being Grade II* - called Grade Two Starred. This category significantly restricts the owner's rights to convert, or even redecorate, the property without specific permission. Sometimes a grant will be available towards the upkeep but this may well be conditional on your agreeing to open the property to the public for a minimum number of days each year.
If you are interested in owning a listed property, or have the opportunity of buying one, there is an excellent source of information. The Listed Buildings Information Service maintains a comprehensive database and if you telephone 020-7208 8221 they can supply the full details of any property - from its complete history to details of which particular features are responsible for the listing. Furthermore, the service is free of charge. Bear in mind that obtaining planning permission within the environs of a listed property can be somewhat complicated. Grade II applications can be determined at Local Council level but anything relating to Grade II* must be referred on to the Department of the Environment and English Heritage and accordingly can take many months to negotiate.
In cases where applicants require a mortgage which exceeds the lender's normal limits they may require the applicant to take out a mortgage indemnity policy with an insurance company for the difference.
NHBC stands for the National House Building Council, which issues a formal ten year warranty on all new property built under its auspices. It will be difficult, though not impossible, to obtain a mortgage on any new property that is outside this scheme. In any case there are other similar types of warranty such as those offered by Zurich Insurance and Foundation 15.
Basically the Council prescribes minimum standards for design and construction, while trained inspectors visit the new property under construction to ensure it is built in compliance with these standards. The builder will have given the NHBC an undertaking to repair any faults which arise within the first two years, while the NHBC insurance scheme will cover any major faults for the balance of the ten-year term which the builder is unable to rectify.
A new house which has been built for the seller's own occupation may not be covered by the NHBC scheme. It should however have been professionally supervised under construction and thus be covered by a comparable architect's certificate or similar form of security. Without some warranty of this nature, it may be difficult or almost impossible to mortgage, and you should take careful advice from your solicitor before proceeding very far with such a property.
A Government tax on the sale of land and property which is related to the sale price. At the present time the tax is 1% up to 250,000 3% from 250,000 to 500,000 and 4% over 500,000. Properties with a sale price of less than 60,000 are exempt.
Subject to Contract
When an offer is made to purchase a property 'subject to contract' it means that all the dealings are subject to the actual exchange of the contract itself. Nothing is binding on either the vendor or purchaser until the contracts are exchanged.
This means the legal ownership of property or goods. As far as the ownership of land is concerned, all titles to residential property are now recorded and guaranteed by the Land Registry. The plans and title records are in the public domain and will be used by the seller's solicitor to form the basis of the sale contract. Once the transaction is completed your name will be registered as legal owner of the property.
A well used estate agency phrase which means that the property being offered will be vacant upon completion of the sale. The property is therefore offered free from any such encumbrances as a sitting tenant or service tenancy.